Or, to quote Scorpions:I agree with all of your final points.
As a purely theoretical thought experiment, yes it's possible. 1hp/in³ isn't all that hard if emissions and cost aren't an issue, regardless of displacement or number of cylinders. To oversimplify it; Give it some compression, let it breathe, and keep it together.
So give her inches and feed her well, more days to come, new places to go, I've got to leave, it's time for a show
I don't exactly think they were talking engines, but, you can pretend they were.